Maybe we need a wall or maybe we don’t. I will save my opinion for a better time and place on the necessity of a border wall. But I do want to make sure that there are no Fraud, Waste, or Abuse in case the wall is to be built.
The cost of constructing the wall is estimated to be around $5 Billion ~ $20 Billion (small range of estimates, huh?)
If things come to it, someone will win the contract and build that wall.
It’s quite clear now that you and I will be paying for it too.
If it does come to it, I just want to make sure that my money pays only for what is intended and not be stolen, wasted, or abused!
So, how can we prevent our money from being abused? Although it’s very difficult to setup a fail safe prevention, we can start with requiring the contractor to do Job Costing. By means of Job Costing, we can;
· Segregate Direct Costs
o I only want to pay for what goes in the wall
· Allocate Indirect Costs
o I only want to pay for my fair share of the CEO’s salary and rent, etc.
· Exclude Unallowables
o I don’t want to pay for alcoholic beverages, advertising, finance interest, etc.
Well, requiring Job Costing may be a carrot, but we do need a stick as well, right?
Let’s require annual audits of the contractor’s incurred costs.
Do you agree that job costing and audits might help with making sure our tax payers’ dollars don’t go to fraud, waste, and abuse?
This is the main reason I am so proud of my colleagues at the Defense Contract Audit Agency (DCAA).
If you are a Government Contractor, you are familiar with this concept.
Feel free to reach out if you have any questions or would like assistance.
Dan Kim, CPA